Current Law Cases

 

Scope

Lloyds Names; husband and wife; wife introduced as name by husband; test of presumed undue influence in special relationship not satisfied

Case

Society of Lloyds v Khan

Court

(QBD (Comm Ct)) Commercial Court

Jurisdiction

 

Judgment

March 4, 1998

Judges

Tuckey, J.

Legislation

Insolvency Rules 1986 (SI 1986 1925) r.6.5(4)

Reported

[1999] 1 F.L.R. 246; [1998] 3 F.C.R. 93; [1999] Fam. Law 92; (1998) 162 J.P.N. 321

Reference

 

Abstract

K's husband, who was more than 30 years older and far more experienced in business matters than K introduced her as a member of Lloyds. He dealt with all matters connected to her membership, including directing her as to when and where to sign the application form and keeping for himself money paid out to her under the membership. She received no independent advice on becoming a member. The question for the court was whether K had an arguable defence of undue influence to Lloyds' application for summary judgment for her underwriting losses.

 

Held, allowing the application, that K had shown no arguable defence. She failed to demonstrate that by her husband's influence she had been put at a manifest disadvantage by a transaction that was so unwise as to be beyond the ordinary motives of ordinary men and women. Equally, she was unable to show that Lloyds had constructive notice of the undue influence, since the transaction was not on the face of it detrimental to her, nor was there a substantial risk that it was the type of transaction likely to be procured by undue influence. The normal remedy of rescission was not available to K because of the personal nature of the benefits of membership of Lloyds, Society of Lloyds v Leighs [1997] 6 Re L.R. 289, [1997] C.L.Y. 3149 applied.

Subject

Insurance

Keywords

Lloyds Names, Spouses, Undue influence

Counsel

For L: David Foxton. For K: In person. For T: Mark Watson-Gandy Solicitors

Solicitors

For L: Dibb Lupton Alsop. For K: Tennakoons

Sub nomt

Lloyd's of London v Khan

Cases cited

Society of Lloyds v Leighs [1997] 6 Re L.R. 289, [1997] C.L.Y. 3149